Apple Inc (NASDAQ:AAPL, ETR:APC) will hand down its first quarter fiscal 2024 financial results after the stock market closes on Thursday, February 1, and analysts have warned that weak consumer demand in China will drag on the iPhone maker’s revenue.
Capital.com analysts believe this impact will be greatest on Apple’s products division.
“Regional revenue in China is forecast to drop by 1.7%, with greater competition in that market from domestic players also impacting Apple’s topline,” they wrote.
They believe investors will be looking out for commentary from Apple’s management about future consumer demand, not only in China but also in the United States and other developed markets.
“Another issue could be supply disruptions, chip security, and the outlook for the Apple watch off the back of an ongoing patent dispute about the product’s oximeter feature,” they added.
As such, the analysts believe Services revenue will drive Apple’s performance for the fourth quarter, but noted a drop in fees from a year earlier could slow growth in that segment.
Wall Street analysts, on average, expect Apple to report revenue of $117.62 billion for the quarter and earnings per share of $2.09.
Services revenue is expected to grow 9.1% year-over-year to $22.65 billion while iPhone sales are expected to have benefitted from the release of new models, forecast to grow 1.4% over the year-ago quarter to $66.68 billion.
Shares of Apple traded lower ahead of its results, down 1.9% at US$188 in the early afternoon on Tuesday after well-known technology analyst Ming-Chi Kuo projected lower iPhone demand for 2024.